Extraordinary Extranets: Examples

Extranet Examples

Extraordinary Extranets

Here's a couple extranets examples especially of interest to
manufacturers and distributors:

The Big 3's Network

An extranet's primary benefit is in its ability to wring out costs in
the supply chain. Extranets can help companies to finally realize the
benefits of Just-In-Time (JIT) inventory systems, a goal that Electronic Data
Interchange (EDI) failed to achieve. EDI fell short where it came to the
product selection process. It worked well for order exchange and payment
exchange, but offered nothing to support product selection problems. EDI was
expensive to implement and did little for the smaller firms other than reduce
the fears of losing business if EDI wasn't in place. Often, critical
electronic data interchange (EDI) and computer-aided design and manufacturing
and engineering (CAD/CAM/CAE) file transfers are performed through several
different communications protocols. Unless every company that wishes to
participate in information sharing is able to handle these various protocols,
the collaborative environment can't exist.

Today, the Big 3 automakers, Chrysler Corp., General Motors Corp., and
Ford Motor Co. are building a collaborative extranet that links them to their
suppliers through designated ISPs via a managed, virtual private network (VPN)
called the Automotive Network eXchange (ANX). It's estimated to drive billions
of dollars in costs from the supply chain. ANX replaces 50 to 100 direct dial
connections to the automakers, reducing telecommunication cost up to 70%, but
the real payoffs are in speeding and easing communications between suppliers
and manufacturers. ANX will be used to electronically route product shipment
schedules, order information, CAD files for product designs, purchase orders,
and other financial information. The improved exchange of information should
result in new business practices between vendors and manufacturers. "They'll
be holding information rather than inventory" states Laura Migliore, a
Chrysler Corp. process control specialist.

ANX is designed to be a single, secure network for electronic commerce
and data transfer. It promises to alleviate the industry's chronic design
cycle problems by allowing the Big Three to collaborate in real time with
their suppliers over secured areas of the Internet. Upon its completion,
portions of the ANX will theoretically enable simultaneous engineering using
multiple workstations or graphics terminals to run finite element analysis
software, solid modeling CAD packages or even high-speed prototyping with the
fastest communications links. The network will provide the bandwidth required,
not just for CAD/CAM but also for applications such as advanced
videoconferencing and three-dimensional virtual reality design sessions. The
new network is supposed to cut the cost of doing business, but more
importantly, it will speed new automotive designs. Automakers have struggled
with a five-year design cycle, and they want to knock that down to less than
three years.

"ANX is the kind of network I think has enormous potential," said Doug
Buchanan, senior specialist of applications development at Dofasco. Currently,
Dofasco sends its steel parts designs to Ford via file transfer protocol. Ford
does finite element analysis on the designs before transferring the data back
to the steel supplier. With ANX, collaborative or interactive CAD is possible.
"My perception is that most of the technology to collaboratively do CAD/CAM
over networks is there. ANX will help facilitate that."

HOPS For The Web

Heineken USA began rolling out their Heineken Operational Planning
System (HOPS) extranet last year to tighten the links between the brewer and
its network of regional suppliers. With HOPS, resellers can log-in, place
their monthly forecasts for sales and place product orders. "Now, beer from
our brewery in Europe can make its way through the US retail channel in just
about the same time it takes Anheuser-Busch to ship from its domestic
breweries. We can react faster than ever before" states Heineken's
vice-president Dan Tearno. By the end of Summer 1997, 80% of Heineken's sales
will be integrated into HOPS. Heineken expects that investments in the system
will be paid back within one year.